Clean sweep at lotto corp. Kelly McDougald Is Out

TheStar.com - Ontario - Clean sweep at lotto corp.

COLIN MCCONNELL/TORONTO STAR FILE PHOTO

Kelly McDougald, hired by the Liberal government two years ago to reform the Ontario Lottery and Gaming Corp., has stepped down as CEO, along with the board of directors.

Finance Minister Duncan announces sweeping changes in wake of expense claims

August 31, 2009
Tanya Talaga
Rob Ferguson
Queen's Park Bureau

The CEO of troubled Ontario Lottery and Gaming Corp., Kelly McDougald, has stepped down and OLG board chair Michael Gough and the rest of the board of directors have also resigned, Ontario Finance Minister Dwight Duncan announced this afternoon.

Duncan announced the changes in a bid to halt an eHealth Ontario type scandal that has dogged the Liberal government for months, saying taxpayers would be better protected under new leadership at OLG.

The OLG board positions have been filled on an interim basis.

In response to a question, Duncan said McDougald's employment was "severed with cause" and she would not be receiving a bonus.

Duncan has also asked the Auditor General Jim McCarter to review expense practices at OLG. And, a government-wide review of the accountability of agencies, boards and commissions will be initiated to determine what additional steps must be taken to ensure respect for taxpayers money, he said.

Duncan also released to reporters expense claims, reports and receipts that were the subject of a freedom of information request by the provincial Progressive Conservative party.

"I am disappointed about what has been brought to my attention," Duncan said at his press conference.

Some of the flagged expenses show OLG members dinged taxpayers for such items as a $7.70 pen refill, the $1,000 cancellation of a deposit on a Florida condo due to work requirements, a $1.12 cloth grocery bag and a $30 car wash claim submitted without a receipt. Also expensed was $487.50 for a nanny to be paid so a worker could attend meetings from September 2006 to December 2006 - while no receipts were handed in, this expense was repaid.

As the Star reported Saturday, OLG chief executive Kelly McDougald was under fire at her $400,000-a-year job as the Liberals scramble to pre-empt a new onslaught of damaging political opposition on the error-prone agency. McDougald came to OLG two years ago with a mandate to reform the monopoly that oversees everything from Lotto 6/49 to provincial casinos.

She could not be reached for comment.

The Liberals hope today's press conference will stall an expected onslaught from the Progressive Conservatives, who have made a number of freedom of information requests regarding the lottery agency.

The eHealth Ontario spending scandal has plagued the Liberals for months. Both CEO Sarah Kramer and board chair Dr. Alan Hudson resigned as a result. The Liberals are sensitive to public criticism that they lack oversight concerning crown agencies after details of lavish spending at eHealth were uncovered by the PCs and reporters. The impact of the eHealth imbroglio could play out at the polls on Sept. 17 in the St. Paul's by-election.

eHealth was created in September of last year with the mandate to set up electronic health records for all Ontarians, after the former Smart Systems for Health Agency was dissolved amidst criticism it squandered nearly $647 million of public dollars. Public outcry was fierce regarding eHealth when it was reported nearly $16 million in untendered contracts were handed out along with big bonuses and the use of consultants - some of whom were paid nearly $3,000 a day and expensed small items such as a cup of tea for $1.65 or Choco Bites for $3.99.

Duncan was given the OLG file two months ago by Premier Dalton McGuinty and asked to take a closer look at how the corporation operates and report back on any necessary changes. Today's press conference is said to be a result of that investigation.

Lawyer Michael Gough has worked for many provincial agencies in the past. Gough was a partner for more than 20 years in the law firm of Osler, Hoskin & Harcourt LLP where he specialized in public law and regulatory affairs.

Earlier this year the heads of OLG were reprimanded for a series of decisions, such as awarding foreign-made Mercedes-Benz cars as casino prizes at the same time the province was bailing out General Motors and Chrysler.